Tax Advise for NRI deputed to India

848 views 3 replies

anna

mgr

42 Points Posted on 03 December 2010

Dear Friends,

I would like to know, if any NRI (working abroad from many years) got chance to be deputed to India (any office) for 6 months. All his salary, deputation charges, everything is paid in account of abroad bank. (No transaction in India), then What are his tax liabilities.

His staying period is not violating 180 days/financial year in India. i.e.

120days for financial Year 1 (1st Apr'10~31st Mar'11) and

120 days for financial year 2 (1st Apr'11 ~ 31st Mar'12)

Total 240 days.

Your prompt reply would be appreciated.

Regards,

anna

Replies (3)

Ankit Agarwalla

281 Points Posted on 03 December 2010

Primarily being an NRI Working in India, his income is deemed to be accruing in India which makes his income taxable under Income tax Act 1961. But the employee is also subject to tax in some other country, you'll have to check whether there is a Double Taxation Avoidance Agreement(DTAA) with that country. If the country has such an agreement, it will specify the liability of employee, whether he is liable to be taxed in country of provision of service or in country of employment.

or,

you can take an deduction of the tax paid in that other country from the total tax liability computed in India. However do not take a final call on basis of this. I advise you to wait for an expert to reply to this query or consult a Tax Expert manually as there are different rates for NRI's depending upon their nature of work.

Hope m not confusing u further!( I think i am!)

anna

mgr

42 Points Posted on 09 December 2010

Thanks Ankit,

But I need some more expert opinion with detailed explanation as I am still in doubt.

As the staying period in less than 180 days in India, how can it possible to pay the tax for money earned in different country.

120days for financial Year 1 (1st Apr'10~31st Mar'11) and

120 days for financial year 2 (1st Apr'11 ~ 31st Mar'12)

Best Regards,

Anna

CA. Anuj Gupta

Practices in NRI Int.Tax FEMA TP FD

7024 Points Posted on 31 March 2011

I completely agree with Ankit's viewpoint. Here the only recourse for the person shall be article 15 or 16 "Dependent Personal Services" which is in akin to Section 10(6)(vi) which exempts from tax the remuneration by an employee of a foreign enterprise for his services rendered in India provided three conditions are satisfied, which correspond to the three conditions of article 15(2) or 16(2) as the case may be, i.e.,

(i) the employer is not engaged in any trade or business in India (corresponding to condition (b) of article 15(2), the employer being resident of the State of employment),

(ii) his stay in India does not exceeds ninety days (corresponding to (a) requiring stay should not exceed 183 days), and,

(iii) remuneration not liable to deduction chargeable under the Indian Income-tax Act, 1961 (corresponding to (c), remuneration borne by employer permanent establishment/fixed base).